Car Insurance Prices rise 8.4% in a Year…A Familiar Story

The brakes have come off cheap car insurance as the average price of comprehensive cover rose 4.3% to £1,034 in the three months ending June.

Despite slowing prices over the previous six months, car insurance has surged 8.4% over the past year, according to motoring organisation the AA.

Cheaper cover is available from car insurance comparison sites, where the AA found average premiums dropped 0.9% to an average £631 – a fall of 3.3% over the year.

Scotland is the cheapest place to buy car insurance, with an average quote of £727, while Manchester and Liverpool are the most expensive at £1,648.

Simon Douglas, director of AA Insurance, says that the insurance market ‘is in turmoil’ at present, with some insurers increasing premiums while others are cutting prices to broaden their customer base.

“Competitive pressure is leading some companies to make big premium cuts on price comparison sites so that they can increase their portfolio of customers,” he said.

“While this is great news for consumers, they need to make sure they’re getting good cover, not just a good price.”

Douglas also hinted at a behind-the-scenes war waged between insurers and fraudsters, including exchanging information about suspected crooks trying to manipulate applications to get cheaper insurance quotes.